[Meagan]

I have friends who, because of a sudden illness, can no longer afford their mortgage. They've found a place to rent for half the mortgage payment. How do they "opt-out" of their mortgage, and is this better than letting the bank foreclose?

[admin]

You have 2 liquidation options.

1. Short sale the property - sell the house for less than what is owed

2. Deed in Lieu - Give the property back to the bank although it will show up as a foreclosure on record it is my understanding it does not stay on your credit report as long. You will not be able to give the house back (Deed in Lieu) if there are any liens of judgments (including second mortgage unless with same lender).

Your best option is having the house sold through a short sale contact ForeclosureHelpSellMyHome.com and fill out their form.

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